GLOBAL MARKETS-Global stocks, commodities rise on US fiscal deal

By Herbert Lash and Ryan Vlastelica NEW YORK, Jan 2 (Reuters) - Global stocks jumped 2 percentor more and commodities rallied on Wednesday after U.S.legislators struck a deal to halt a round of automatic fiscaltightening that threatened to push the world's largest economyinto recession. The deal reached on Tuesday to avert the "fiscal cliff" putoff the immediate pain of income tax hikes for almost all U.S.households but did nothing to resolve other political impasses on the budget that loom in coming months, including the debtceiling. Oil prices pared some gains but Wall Street rallied at theclose, with the benchmark S&P 500 posting its best day in morethan a year. The CBOE Volatility Index, or VIX, a gaugeof investor anxiety, dropped 18.5 percent to 14.68 at the close.The VIX has fallen 35.4 percent over the past two sessions. The markets' reaction to the U.S. budget deal was a "sigh ofrelief that a recession in the world's largest economy has beenaverted," said Marc Chandler, global head of currency strategyat Brown Brothers Harriman in New York. Copper rose to its highest in more than two months, whilesilver and platinum group metals also rose sharply. The S&P 500achieved its biggest one-day gain since Dec. 20, 2011, pushingthe index to its highest close since Sept. 14. The Dow Jones industrial average closed up 308.41points, or 2.35 percent, at 13,412.55. The Standard & Poor's 500Index rose 36.23 points, or 2.54 percent, at 1,462.42.The Nasdaq Composite Index gained 92.75 points, or 3.07percent, at 3,112.26. Still, the rally may be short-lived. Spending cuts of $109billion in military and domestic programs were only delayed fortwo months, and a fight over the limit for U.S. government debtalso looms. "There was the fiscal cliff euphoria, but the markets are alittle overdone and people realize you still have the debtceiling battle, social security taxes going up and dealing withspending sequestration and budget cuts," said Mark Waggoner,president at Excel Futures Inc. The deal boosted investors' appetite for riskier assets anddepressed the U.S. dollar against major currencies. Brent crudeoil hit an 11-week high of nearly $113 per barrel and goldprices rose nearly 1 percent. Brent February crude rose $1.36 to settle at$112.47 a barrel, after reaching $112.90. U.S. crude forFebruary delivery rose $1.30 to settle at $93.12 abarrel. The vote in Congress removed a major uncertainty hangingover markets, but some analysts cautioned that the optimismcould fade if U.S. economic data later this week, including theDecember payroll report, disappoints. U.S. manufacturing expanded slightly in December, bouncingback from an unexpected contraction the prior month, accordingto an industry report released on Wednesday. The MSCI all-country world equity index rose2.05 percent. The pan-European FTSEurofirst 300 closed2.1 percent higher at 1157.40. In currency markets, the euro retreated afterreaching a two-week high earlier in the session to trade down0.15 percent at 1.3183. The U.S. dollar rose 0.06 percentagainst a basket of major currencies. Prices of safe-haven government debt fell. Germany's Bundfuture posted its biggest daily fall since earlySeptember, settling down 1.57 points at 144.07. Yields on U.S. benchmark 10-year Treasury notes hit a more than three-month high, with the price falling 24/32to yield 1.8406 percent. Venezuela's U.S. dollar-denominated sovereign bonds ralliedacross the yield curve on Wednesday in a sign of increasedappetite for risk. The benchmark 2027 Global bond gained 1.536 points in price to bid 99.79, yielding 9.273. The Thomson Reuters-Jefferies CRB index of 19commodities rose 0.85 percent, with metals dominating gains.